Digital Transactions Authoritative, insightful and timely information for payments professionals
Block Inc.’s top management late Thursday said the company’s focus for the remainder of the calendar year is on enhancing its go-to-market strategy. That means improving sales, boosting partnerships, sharpening marketing, and product innovation, Block chief executive Jack Dorsey said during the company’s 2024 second-quarter earnings call.
Dorsey lost no time, opening the call by announcing that Afterpay chief executive and co-founder Nick Molnar will head a sales group across Block’s Square, Cash App, and Afterpay units.
A key reason Block acquired Afterpay was to strengthen sales across Square and Cash App, Dorsey said in his letter to shareholders, which was released Thursday and which he referenced throughout the call. Block completed its $29-billion acquisition of Afterpay in January 2022.
In his letter, Dorsey says Afterpay has brought a “high-performing sales culture into parts of Block’s business,” which has driven growth for Cash App products, such as Cash App Pay and buy now, pay later loans.
“We want to extend this strength across the company,” Dorsey says in the letter. “I’m confident this move with sales will put Square back in the lead for sellers around the world.”
Molnar’s new duties will include “immediately raising the performance bar” for the Square sales team, Dorsey said, by continuing to hire inbound and outbound sales representatives and building out Square’s field-sales strategy and team.
Molner will also focus on strengthening Block’s sales materials, training, and incentives, and connecting Square’s systems and consumer scale with Cash App. The latter move is something “which can’t be easily replicated by our competitors,” Dorsey said in the shareholder letter.
In his remarks to stock analysts Dorsey said Molnar’s new duties align with Block’s recent decision to reorganize its reporting structure by function, which he said will enable more collaboration across Block’s different ecosystems.
“This will also help our people get to true mastery of their craft and open up opportunities for mobility within disciplines,” Dorsey told the analysts. “We plan to execute this change this month with minimal disruption.”
Elaborating further on Block’s new reporting structure, Dorsey said the move will not impact the company’s strategy or financial goals. “Instead, we believe it will allow us to move with greater speed, agility, and efficiency” on Block’s growth initiatives, he added.
One expected benefit of the new reporting structure is that it will provide more “flexibility” and “collaboration” within each of Block’s business units, thereby fostering better “technology, design and products,” by making those areas a focus for each business unit, Dorsey said on the earnings call.
For the quarter, Block’s gross profit totaled $2.23 billion, a 20% year-over-year increase. Square posted gross profit of $923 million, up 15%. Cash App, Block’s mobile payment service, generated gross profit of $1.3 billion, up 23% year-over-year.
In addition, Cash App generated $1.42 billion of subscription and services-based revenue during the quarter, up 23% from a year ago. Cash App also plays extremely well with Millennials and Gen Zers, which make up about 75% of the wallet’s users, according to Amrita Ahuja, Block, chief operating and chief financial officer, who also spoke during the call.
Dorsey noted that Square released more than a dozen new product and feature enhancements for retail sellers during the quarter. These enhancements will allow Square sellers to quickly build custom Web sites and write product descriptions using generative AI, a form of artificial intelligence that generates text, images, videos, and other data. This move will improve sellers’ ability to create a unique brand as a Square merchant, according to Dorsey.
“These innovations, coupled with advancements in inventory management and unit-cost analysis, can save our sellers time and help them understand their businesses better,” Dorsey said in the letter.
Another highlight from the quarter was the completion in July of Block’s new merchant-onboarding platform. The platform now reduces the number of steps required to onboard a merchant from more than 30 to four, the company says.
“It also allows more customization based on the traits of a given seller, saving them time during onboarding and introducing them to relevant products at the optimal point in their onboarding journey,” Dorsey said in the letter. “With our new platform in place, we’ve made it much easier to test new onboarding flows at scale, allowing us to optimize our growth more efficiently.”
